audit right there

PRC candidate’s finance reports raise questions about expenditures

If Jerome Block Jr. wins the race for New Mexico’s 3rd Public Regulation Commission district, taxpayers will pay the Democrat an annual salary of $90,000.

But the State of New Mexico has already doled out tens of thousands to the candidate under the state’s public campaign finance laws. How he’s spending it raises questions for campaign watchdogs.

An SFR investigation of Block’s campaign finance reports shows several spending anomalies, including $2,800 paid out to a county election official and $1,300 in funds that are currently unaccounted for.

Furthermore, SFR has discovered that Block paid more than $1,000 to himself and his family for “reimbursement,” without explaining the nature of the payment.

On April 7, Block collected $36,730 (the equivalent of 25 cents per Democratic voter in the district) from the Public Election Fund, an account created by the Voter Action Act in 2003 to allow candidates to campaign with public money. The rationale behind the legislation was that eliminating the need for fundraising allows candidates to run for office without accepting favors and money from regulated corporations.

“The general philosophy was so candidates wanting to run for office would not have to count on special interest money,” House Speaker Ben Luján, who sponsored the legislation, tells SFR. “It provides an opportunity for people that might not have the resources and so people don’t have to go to special interests to get money to run their campaigns.”

The money in the fund comes from inspection fees placed on utilities and a tax on insurance premiums. In other words, publicly-financed candidates receive their money from the state government.

In Block’s case, some of it ended up in the San Miguel County Clerk’s Office.

According to Block’s campaign records, a few days after the June 3 primary election, Block cut a $300 check to San Miguel County Clerk “Pecos” Paul Maez for “campaign coordination.” San Miguel is the only county Block won in the six-way Democratic primary. Block used Maez’ official clerk’s office address on the report.

That same day, Block also cut a $2,500 check to the country-western band Wyld Country, in which Maez is a guitarist. According to Block’s campaign, the payment was for a rally in San Miguel County just prior to the primary election. Block deferred questions to his recently appointed campaign manager Jonathan Valdez.

“The vast majority of Paul Maez’ help was outside of San Miguel County,” Valdez writes in an e-mail to SFR. “Paul has always maintained and upheld the highest ethical standards and integrity in his personal life and in his professional capacity.”

Maez did not return multiple messages left with his office and on his cell phone. However, Santa Fe County Clerk Valerie Espinoza tells SFR that, as an election official, she would never accept payment from a candidate’s campaign.

“You have to keep your distance, whether they’re your friends or not,” Espinoza says. “It’s been difficult for me because all my life that’s what I’ve done. I’ve always been there to knock on doors and ask people to support candidates I think will do a good job. But in the meantime as clerk, I recognize that it’s my duty to be fair and impartial and I don’t get involved in any race.”

Taxpayers may also have questions to ask. For example: What happened to the money that vanished from Block’s May finance reports?

On May 12, Block’s campaign reported it finished the period with $30,279 in the bank. On the next report, May 29, Block’s campaign shows an opening balance of $28,956—a gap of more than $1,300. SFR previously reported that Block failed to report any expenditure for the Web site built for him by MATI Networks, his father’s employer and an entity with issues regularly before the Public Regulations Commission [July 16: “All in the Family”].

Furthermore, using campaign funds, Block paid himself $200, his wife $200 and his father, former Public Regulation Commissioner Jerome Block Sr., $600 for “reimbursements.” The nature of the expenditures is not explained in the campaign finance reports.

Nor did Valdez specifically explain the expenditures, instead noting via e-mail: “Our campaign has followed all campaign-finance laws and will continue to do so. Jerome’s campaign follows all rules set forth by the ‘Voter Action Act,’ and adheres to all rules and laws set forth by federal and state statutes.”

As for the law, PRC candidates face significantly higher penalties than candidates in other races for campaign finance law violations. Those penalties include up to $10,000 in fines and a full refund of public funds—in this case, more than $100,000.

Following the general election, the Secretary of State’s Office is required to randomly audit 10 percent of campaign finance reports filed. In the event of inconsistencies in reporting, the SOS may initiate an investigation or refer a case to the Attorney General’s office. However, during the campaign season, the SOS first requires an official letter of complaint, according to spokesman James Flores.

Common Cause New Mexico, the organization that lobbied for the Voter Action Act in 2003, had a strong reaction when informed of the problems in Block’s campaign report.

“That is an astonishing list of irregularities that Block needs to come up with some satisfactory answer to,” Executive Director Steve Allen tells SFR. “It’s just amazing. I think the really troubling part are these payments to the county clerk, which seems like a very, very obvious conflict of interest. Voters deserve an explanation.”

Block and his Green Party opponent Rick Lass will file their next campaign-finance reports in October. Both received $64,778 in public funding for their general election campaigns.

Although the list of expenditures won’t be available for several months, the Taos Daily Horsefly reported that at a recent rally with current PRC Commissioner and congressional candidate Ben Ray Luján (son of Speaker Luján), Block promised the Taos County Democratic Party a check for $2,000.

“As the Democratic nominee, Jerome believes that it is important to help Democratic committees and other Democrats to spread our message of fighting for the middle class, working towards energy independence and quality education for our children,” Valdez writes.

While the donation is legal under state law, it may contravene the intention of the Voter Action Act because it is the equivalent of funneling money to a political party or, worse, a financial incentive to support a candidate in a race in which prominent Democrats, such as former New Mexico Democratic Party Chairman Earl Potter, are beginning to endorse the Green Party candidate.

Lass tells SFR he has not and does not plan to donate any funds to New Mexico’s Green Party.

“I’m actually hoping it goes the other way around and they give me money,” Lass says, referring to a provision that allows political parties to donate up to 10 percent, or $6,478, to a publicly funded candidate’s campaign.

In that case, Block will collect even more state money: The Voter Action Act also says that if one PRC candidate raises or spends more than another, the Secretary of State has to immediately cut a check to even the playing field.